Coronavirus impact: Private insurers bat for standard treatment rates

As claims from Covid-19 patients start to flow, private insurers push for standardisation of treatment costs on the lines of the diagnostic costs. Hospitals, on the other hand, claim that it would be impossible to operate under a price-fixed treatment protocol, as each case requires different treatment given the individual's accompanying illnesses.

So far, the number of claims handled by the private insurers from Covid-19 patients has been fairly less. Insurers said related claims have just started trickling in. Haryana has already indicated Ayushman Bharat rates be followed by private hospitals to treat Covid-19 patients. Sources claimed Maharashtra, too, was mulling a pricing advisory for treatment of general patients. Cost of the diagnostic test for Covid-19 has been fixed at Rs 4,500 per test by the government. Hospitals, however, do not think this is feasible. "The cost of protective gear itself would be more than that. If we compromise on protecting our health care staff, we eventually compromise the health for our patients. We would not do that," said one Karnataka-based hospital chain. Karnataka is treat patients at government hospitals. If anyone turns up at private hospitals, they are diverted to the public facilities.

Priya Gilbile, chief operating officer of ManipalCigna Health Insurance that has handled three confirmed cases, said the initial estimates are averaging around Rs 2 lakh. “Currently, Covid-19 treatment costs are open-ended and on a fee-for-service model. We are hoping that as the diagnostic test charges in private labs are pre-fixed and standardised, the treatment costs will undergo some consideration. We are speaking to the government to see if the treatment costs can be standardised and bundled in private hospitals, similar to the diagnostic testing," she said.

Gilbile said they were experiencing a large number respiratory infection cases that were being treated in line with Covid-19 regimen. “Even with most of the cases turning out negative, the cost incurred during the interim phase leads to overall increase in cost of treatment,” she said.

For example, the charges for isolation rooms are twice as much as regular rooms. The chief executive officier of a private hospital chain, which has handled less than a dozen cases so far, said that the cost of treating even the most general patient of Covid-19 (one who does not have any accompanied illness like heart, lung, kidney, or cancer, diabetes, etc) is also high, given the protective gear the caregivers have to wear.

"Most of the isolation rooms in our hospitals have been carved out of the larger suit rooms. Even if we don't charge the normal rates for these rooms, a standard single room charge, too, is higher than a bed in a ward. Moreover, the nurses, ward boys, and doctors all need to wear protective gear and each one costs Rs 1,800 or so. They need to change this gear every four hours and we have worked out the requirement which is roughly 2.5 protective personal equipment (PPE) per patient per day," the CEO said.

He added that another reason for the high costs is that the average length of stay (ALOS) in this case is much longer — 14 days, in comparison to 3-3.5 days ALOS in hospitals. Even an angioplasty (a cardiac procedure) patient is discharged in three days or so, according to hospitals.

Insurers acknowledge the cost of protective gear required in Covid-19 cases. However, they want a uniform code to be set. Subrata Mondal, executive vice-president of IFFCO Tokio General Insurance, said that as of now there is no medical protocol that could be followed for levying uniform charges. "There may be charges for protecting health care staff like PPEs and other requirements to avert the spread. We hope the concerned authorities will design appropriate protocols," he said.

Mondal said they were soon going to launch a product that would specifically cover coronavirus-related illnesses. “The policy will be much cheaper and such additional expenses may be covered under the policy, including both quarantine and hospitalisation expenses.”

As such the Insurance Regulatory and Development Authority of India (Irdai) had mandated all health and general insurance companies to offer a standard product called the Arogya Sanjeevani policy. Around 29 insurers now offer this product that comes with a maximum sum assured of Rs 5 lakh. Insurers have also seen huge traction for health policies ever since the pandemic broke out and the IRDAI said that all health policies will have to cover the cost of Covid-19 treatment. In the Arogya Sanjeevani policy, room rent is capped at 2 per cent or a maximum sum of Rs 5,000 per day and intensive care unit charges at 5 per cent (or Rs 10,000 max per day).

Private hospitals say that given the ALOS, average cost for a Covid-19 patient would run into Rs 7-8 lakh or so.